Suppose the Small Country of Trantor Has a Steady Growth

question 123

Multiple Choice

Suppose the small country of Trantor has a steady growth rate of 2.5 percent.Its GDP is expected to double in

• A)70 years.
• B)5 years.
• C)2.5 years.
• D)28 years.

---

Definitions:

Compound Interest

Interest calculated on a loan or deposit, taking into account the original principal as well as the interest that has accumulated in past periods.

Initial Deposit

The first payment made as part of a larger sum, often required to secure a purchase or open a financial account.

Transactions Costs

The expenses beyond the price of the product that buyers and sellers incur when making a transaction, such as fees, taxes, or other expenses.

Interest Rate

The cost of borrowing money or the compensation for lending money, usually expressed as a percentage of the principal amount per period.